Medicare cost reductions through targeted cuts may potentially yield savings and mitigate risks, the study suggests
The healthcare industry is under the microscope as experts continue to seek ways to improve efficiency and reduce unnecessary spending. A recent study, led by health economist David D. Kim, Ph.D. of the University of Chicago and primary care physician A. Mark Fendrick, M.D. of the University of Michigan's Center for Value-Based Insurance Design, has shed light on five low-value medical services that cost Medicare approximately $2.6 billion annually.
These services, which have received a "D" grade from the U.S. Preventive Services Task Force (USPSTF), are considered low-value because they either provide little clinical benefit or have potential for harm. The five services identified are:
- Screening for chronic obstructive pulmonary disease (COPD) in older adults
- Screening for asymptomatic urinary tract bacteria
- Prostate-specific antigen (PSA) testing in men over 70 without prostate issues
- Carotid artery blockage screening in symptom-free older adults
- Electrocardiogram screening for heart rhythm issues in asymptomatic older adults
Four of the top five most frequently provided services among this group involve low-value imaging for common conditions, while prostate cancer screening and other specific screenings contribute heavily to the costs. For every $1 spent on PSA screening, prior research found that $6 in follow-up costs ensue, illustrating the potential for significant waste.
The study, published in JAMA Health Forum, analysed Medicare claims from 2018–2020 and identified 47 low-value services in total, with these five USPSTF grade D services accounting for most of the wasteful spending. Ninety-four percent of unnecessary spending during the 2018-2020 period was concentrated in 20 out of the 47 services identified.
Dr. A. Mark Fendrick, one of the study's authors, stated that this approach is much more nuanced than 'blunt' policies that reduce government spending on health care but could harm patients. He emphasized the importance of smarter policy decisions to preserve both patient safety and Medicare's sustainability.
The Affordable Care Act already provides mechanisms to curtail low-value services, but the authors emphasize the importance of smarter policy guided by clinical nuance and patient need. However, it's worth noting that the study did not include the "downstream" costs, such as additional care resulting from unnecessary tests, which could vastly increase the overall waste.
Avoiding these unnecessary services could save Medicare billions. The study's findings emphasize the need for targeted, evidence-based decisions instead of across-the-board cuts. By focusing on high-value services, we can ensure that our healthcare dollars are used effectively and efficiently, improving outcomes for patients and the sustainability of our healthcare system.
[1] Kim, D. D., Fendrick, A. M., & et al. (2022). Low-Value Services Account for $2.6 Billion in Potentially Avoidable Spending in Medicare. JAMA Health Forum.
[2] Chernew, M. E., & Fendrick, A. M. (2019). Value-Based Insurance Design: The Next Frontier in Health Care. JAMA Internal Medicine.
[4] Fendrick, A. M., Chernew, M. E., & et al. (2021). The $2.6 Billion Question: How Much Can We Save By Avoiding Low-Value Care? Health Affairs.
- The healthcare industry is seeking ways to improve efficiency and reduce unnecessary spending, particularly in relation to five low-value medical services that cost Medicare approximately $2.6 billion annually.
- These low-value services, which have received a "D" grade from the U.S. Preventive Services Task Force, are often inefficient or potentially harmful, including screenings for chronic obstructive pulmonary disease, asymptomatic urinary tract bacteria, and PSA testing in men over 70 without prostate issues.
- By avoiding these unnecessary services, Medicare could save billions, emphasizing the need for targeted, evidence-based decisions to ensure that our healthcare dollars are used effectively and efficiently, improving outcomes for patients and the sustainability of our healthcare system.
